What to do when selling a business

I want to follow up on a previous post since with the continued improvement in the economy and the aging of many business owners, business transactions remain on the uptrend. 2015 and 2016 look to be promising years for selling a business, and sellers who are best prepared will be rewarded for their planning. Taking a few simple steps will be valuable to both the seller and the buyer, making the transaction minimally disruptive to all those involved.

Unless you are approached with an unsolicited offer you should have an idea in advance of why you want to sell the business and target not only the right buyers, but also have a good idea of what sort of terms you would ideally want. With an understanding of why you want to sell the business, you can then have better conversations with the appropriate professionals.

During, or shortly after answering the why you want to sell your business question, you should begin working on developing and selecting the right professionals that you want to work with. More than likely as a business owner you may already have an established relationship with an attorney, accountant and investment banker, but if not or if they aren’t suited for your transaction, you can talk with peers and others who have been down this path before. A local association of business brokers , or a chamber of commerce can often be an excellent source for referrals. Once you have identified the business professionals you should be prepared with adequate documentation, this will not only speed up the process but it will add to your business’s credibility. Among the documentation make sure to have the following items:

Historical financial statements and tax returns for the past two years ideally they will have been audited by a CPA, but if not at least have them reviewed for reasonableness

Forward financial looking financial statements and the underlying assumptions for 3-5 years

Customer documentation and contracts

Business entity documentation

As part of preparing both the historical and forward looking financial information, look for ways to make minor adjustments that will increase your existing businesses performance and value. Most likely you will uncover subtle changes that can put significant money in your pocket.

Finally while all of this is going on make sure that you remain focused on the day to day business. As one of my mentors always said, the deal isn’t closed until the check clears the bank.

The Shared Finance Center provides outsourced accounting, bookkeeping and fractional CFO support to small business owners and in doing so we heavily focus on maximizing cash flow. We are headquartered in Roswell, Georgia and work with clients across the United States. If you think that this post would be helpful to anyone you know, please pass it along. Also please follow our blog for regular tips to grow your business.